Correlation Between REINET INVESTMENTS and Air Lease

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Can any of the company-specific risk be diversified away by investing in both REINET INVESTMENTS and Air Lease at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining REINET INVESTMENTS and Air Lease into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between REINET INVESTMENTS SCA and Air Lease, you can compare the effects of market volatilities on REINET INVESTMENTS and Air Lease and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in REINET INVESTMENTS with a short position of Air Lease. Check out your portfolio center. Please also check ongoing floating volatility patterns of REINET INVESTMENTS and Air Lease.

Diversification Opportunities for REINET INVESTMENTS and Air Lease

0.45
  Correlation Coefficient

Very weak diversification

The 3 months correlation between REINET and Air is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding REINET INVESTMENTS SCA and Air Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Lease and REINET INVESTMENTS is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on REINET INVESTMENTS SCA are associated (or correlated) with Air Lease. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Lease has no effect on the direction of REINET INVESTMENTS i.e., REINET INVESTMENTS and Air Lease go up and down completely randomly.

Pair Corralation between REINET INVESTMENTS and Air Lease

Assuming the 90 days horizon REINET INVESTMENTS SCA is expected to generate 1.65 times more return on investment than Air Lease. However, REINET INVESTMENTS is 1.65 times more volatile than Air Lease. It trades about 0.04 of its potential returns per unit of risk. Air Lease is currently generating about 0.05 per unit of risk. If you would invest  1,572  in REINET INVESTMENTS SCA on September 12, 2024 and sell it today you would earn a total of  868.00  from holding REINET INVESTMENTS SCA or generate 55.22% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

REINET INVESTMENTS SCA  vs.  Air Lease

 Performance 
       Timeline  
REINET INVESTMENTS SCA 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in REINET INVESTMENTS SCA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, REINET INVESTMENTS is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.
Air Lease 

Risk-Adjusted Performance

16 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Air Lease are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile essential indicators, Air Lease reported solid returns over the last few months and may actually be approaching a breakup point.

REINET INVESTMENTS and Air Lease Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with REINET INVESTMENTS and Air Lease

The main advantage of trading using opposite REINET INVESTMENTS and Air Lease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REINET INVESTMENTS position performs unexpectedly, Air Lease can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Air Lease will offset losses from the drop in Air Lease's long position.
The idea behind REINET INVESTMENTS SCA and Air Lease pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Money Managers module to screen money managers from public funds and ETFs managed around the world.

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